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Pumped-storage hydroelectricity (PSH), or pumped hydroelectric energy storage (PHES), is a type of hydroelectric energy storage used by electric power systems for load balancing. The method stores energy in the form of gravitational potential energy of water, pumped from a lower elevation reservoir to a higher elevation. Low-cost surplus off-peak electric power is typically used to run the pumps. During periods of high electrical demand, the stored water is released through turbines to produce electric power. Although the losses of the pumping process make the plant a net consumer of energy overall, the system increases revenue by selling more electricity during periods of peak demand, when electricity prices are highest. If the upper lake collects significant rainfall or is fed by a river then the plant may be a net energy producer in the manner of a traditional hydroelectric plant.
Pumped-storage hydroelectricity allows energy from intermittent sources (such as solar, wind) and other renewables, or excess electricity from continuous base-load sources (such as coal or nuclear) to be saved for periods of higher demand. The reservoirs used with pumped storage are quite small when compared to conventional hydroelectric dams of similar power capacity, and generating periods are often less than half a day.
Pumped storage is by far the largest-capacity form of grid energy storage available, and, as of 2020, the United States Department of Energy Global Energy Storage Database reports that PSH accounts for around 95% of all active tracked storage installations worldwide, with a total installed throughput capacity of over 181 GW, of which about 29 GW are in the United States, and a total installed storage capacity of over 1.6 TWh, of which about 250 GWh are in the United States. The round-trip energy efficiency of PSH varies between 70%–80%, with some sources claiming up to 87%. The main disadvantage of PSH is the specialist nature of the site required, needing both geographical height and water availability. Suitable sites are therefore likely to be in hilly or mountainous regions, and potentially in areas of natural beauty, making PSH susceptible to social and ecological issues. Many recently proposed projects, at least in the U.S., avoid highly sensitive or scenic areas, and some propose to take advantage of "brownfield" locations such as disused mines.

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